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NewsMontenegro, What are the solutions for the airport problems?

Montenegro, What are the solutions for the airport problems?

Montenegro has several options when it comes to valorization, i.e. giving its airports into a concession, but the most important thing is that the conditions in a future tender, if it happens, should be better than the previous one, announced Prime Minister Dritan Abazović.

He said at the Government session, where the oral Information on the process of granting the airport concession was discussed, that there are two solutions.

“One is to terminate this concession and open a new one.” It doesn’t have to either, but a new one can be opened under significantly better conditions. When talking about this new one, it can go in two directions – that only one airport be the subject of a concession, and that we develop and modernize the other ourselves,” said Abazović.

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He also explained that there Is a possibility to enter into direct negotiations with the previous qualified bidders and to ask them for much better terms than were stipulated in the tender.

“We were all waiting for the political waters to clear up, but I think we should make a decision, in one direction or another.” In any case, I think that the demands that were then are really unacceptable now. To give two airports under concession for that money is really unacceptable,” said Abazović and added that the state, regardless of everything, must also develop new airports.

State Secretary in the Ministry of Capital Investments Admir Šahmanović, explaining the information, reminded that almost four years have passed since the adoption of the concession act and that in the meantime nothing has been done since the middle of 2021, when the interested companies, which entered the pre-qualification process, confirmed their interest.

The concession deed provided for 100 million EUR of one-time compensation for the budget and 200 million EUR of investments over the next 30 years.

“Considering that so much time has passed and that the market conditions have changed, it may be necessary to revise the Government’s position and look towards some other solution,” said Šahmanović.
He reminded that the public call for the award of the concession was announced in accordance with the old law on concessions from 2009, and that a new one was adopted in the meantime, which does not provide for the granting of concessions in that area.

“The only solution in the future would be to model it in relation to the Law on Private-Public Partnership,” claims Šahmanović.

As he recalled, the entire process was led by colleagues from the IFC, which are part of the World Bank (WB).

“Due to the indecision of this and the previous government, we have come to a situation where we are about to terminate the contract, where we are obliged to pay EUR 350 thousand. We had a meeting with them and they expressed their willingness to prepare the project for that amount and implement the process up to the first stage, in accordance with the Law on Private-Public Partnership. That may be the only direction for further action”, believes Šahmanović.

The Minister of Finance, Aleksandar Damjanović, assessed that it is good that they received the oral information, which requires a decision to be made.

Damjanović believes that the existing procedure should be suspended, due to the inadequate conditions of the offer.

“If we would like to proceed with a new procedure, we have assurances from the IFC that we could have everything ready in the preliminary part for the fall of the current year, and next year we would have a tender at full capacity, which would include drastically better conditions,” he said. Is Damjanović.

If the decision is different, then, as he said, it is necessary to define as soon as possible a model where the state, together with the airports, from its own funds or through international credit arrangements, could and must quickly invest in new capacities or modernization of existing ones, because such airports are inadequate.

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